South African fuel users are set to reap a welcome benefit courtesy of Rand strength and oil weakness in the wake of the United Kingdom’s vote to exit the European Union. This is according to the Automobile Association (AA) which was commenting on unaudited mid-month data released by the Central Energy Fund (CEF).
“After initially weakening in the wake of the UK referendum result in late-June, the Rand has since strengthened steadily,” the AA said.
“At the same time, international petroleum prices have retreated on concerns over economic uncertainty following the vote. As a result, fuel prices are showing favourable gains.”
The mid-month data sees petrol poised for a drop of up to 83 cents a litre, with diesel set for a reduction of 45 cents and illuminating paraffin around 42 cents a litre down.
“Despite this positive picture, predicting the likely position at the end of July remains complex,” the Association commented.
“The underlying trend has been towards higher fuel prices over the past months as the Rand weakened and international oil prices climbed. It is not yet clear what effect recent events will have on this trend, and it would be premature to assume it has been disrupted.” the AA commented.
“Accordingly, we advise motorists to maintain a conservative approach, and not take on additional expenses in the expectation of sustained fuel price drops,” the Association concluded.